(What's Left of) Our Economy. trade, Eurozone, exports, high tech goods, imports, Made in Washington trade deficit, manufacturing, non-oil goods trade deficit, oil, recovery, South Korea, trade deficit
America’s goods and services trade deficit grew sequentially for the third straight month in November. The 6.80 percent monthly rise pushed the shortfall to $45.24 billion – its highest total since February’s $45.26 billion. Leading the increase were record monthly deficits in manufacturing ($80.75 billion), high tech goods ($13.53 billion), plus the great shortfall in oil in current dollars ($6.02 billion) since August, 2015 ($7.07 billion). Largely as a result, the merchandise deficit of $66.63 billion was the largest since March, 2015 ($70.40 billion). More encouragingly, the services trade surplus ($21.39 billion) was its largest since December ($21.57 billion).
Overall goods and services exports fell sequentially (by 0.24 percent) while their imports rose (by 1.06 percent) and hit another post-August, 205 high. Big monthly merchandise deficit increases were registered with the Eurozone (up 18.56 percent), and Korea (88.22 percent). And the November increase in the real non-oil goods (Made in Washington) portion of the trade deficit to a five-month high of $59.30 billion indicates that the trade drag on feeble recovery-era growth is set to increase.
Here are selected highlights of the latest monthly (November) trade balance figures released this morning by the Census Bureau:
>The U.S. goods and services trade deficit rose in November by 6.80 percent, from a downwardly adjusted $42.36 billion to $45.24 billion – the highest such total since February ($45.26 billion).
>The increase was spearheaded by new record deficits in manufacturing ($80.75 billion) and high tech goods ($13.53 billion), and the biggest oil trade gap in current dollars ($6.02 billion) since August, 2015 ($7.07 billion).
>In addition, the overall merchandise deficit of $66.63 billion was the greatest such total since March, 2015 ($70.40 billion).
>Also contributing to the overall rise in the November trade deficit – an 18.56 percent sequential move up in the merchandise trade gap with the Eurozone (to $12.64 billion), fueled no doubt by a weakening currency; and a stunning 88.22 percent jump in the goods deficit with South Korea (to $2.40 billion).
>The November manufacturing trade deficit was 4.90 percent higher than October’s $76.98 billion level, and slightly higher than the previous all-time high of $80.43 billion set in August.
>November manufacturing exports dropped by 5.41 percent sequentially, from $90.91 billion to $85.99 billion, but imports dipped by only 0.68 percent, from $167.89 billion to $166.74 billion.
>On a year-to-date basis, the manufacturing trade deficit stands at $792.30 billion, and is running 3.51 percent ahead of last year’s record pace.
>January-November manufacturing exports are down 6.31 percent year-on-year, while imports are off only 2.01 percent.
> The record high tech goods trade deficit of $13.53 billion hit in November obliterated the old record of $11.72 billion, set in November, 2012, by 15.44 percent.
>High tech goods exports sank by 8.93 percent on month, to $27.79 billion, while imports rose by 5.37 percent. Their $41.32 billion level was the highest since October, 2015 ($41.38 billion).
>Year-to-date, however, the high tech goods deficit is still down 5.80 percent from last year’s levels.
>November’s $6.02 billion current-dollar oil trade deficit was the highest such total since August, 2015’s $7.07 billion total. This figure was also 5.60 percent higher than the October level.
>Yet the oil trade deficit year-to-date ($50.45 billion) is still fully 36.06 percent lower than last year’s January-November figure.
>The higher November merchandise deficit with the Eurozone stemmed from a 10.39 percent in U.S. goods exports to the troubled region, whose currency keeps weakening versus the U.S. dollar, and a 0.72 percent bump up in American goods imports.
>Year-to-date, the Eurozone deficit is still down 3.47 percent from last year’s levels.
>The near-doubling of the U.S. goods deficit with South Korea, a free trade agreement partner of merica’s since 2012, reflected a 10.93 percent decrease in U.S. merchandise exports and a 13.80 percent increase in American imports.
>Year-to-date, the merchandise deficit with South Korea is running 0.56 percent higher than last year’s total.
>One of the few bright November-specific bright spots in the trade report was came in services. Its long-running surplus increased 2.54 percent on month, from $20.86 billion to $21.39 billion. That total was the sector’s best since last December ($21.57 billion).
>Yet a cause for concern is the year-to-date services surplus. At $226.58 billion, it’s currently 5.84 percent lower than last year’s January-November figure ($240.63 billion).
>The combined U.S. goods and services trade deficit for 2016 stood at $453.99 billion – 1.06 percent lower than at this point last year.
>Overall U.S. exports fell 0.24 percent sequentially in November from a downwardly revised $186.28 billion to $185.83 billion. Overall imports increased nearly five times faster – from a downwardly revised $228.64 billion to $231.07 billion. That level was their highest since August, 2015 ($231.26 billion).
>Year-to-date, overall exports are off 2.72 percent while imports are down by 2.42 percent.
>A 5.69 percent monthly rise in the November real non-oil goods trade deficit indicates that these trade flows remain a major drag on the current, historically feeble American economic recovery.
>This Made in Washington deficit – which is heavily influenced by U.S. trade agreements and related policy decisions – had been narrowing lately, with its growth-subtracting on the recovery down to 16.05 percent of the cumulative improvement in real gross domestic product as of the third quarter.
>But in November, it hit its highest level ($59.30 billion) since June ($60.76 billion).
>The publication of next month’s first full-year 2016 trade data will permit a preliminary fourth quarter calculation to be made.
>The American merchandise trade deficit with China declined in November by 1.96 percent, from $31.11 billion to $30.50 billion.
>U.S. goods exports to China’s still healthily growing economy fell by 4.56 percent on month in November, while goods imports were down 2.71 percent.
>Year-to-date, this China shortfall is running 5.90 percent behind last year’s record pace.